Achieving financial independence (FI) might seem like a distant dream, but it’s closer than you think. By following some tried-and-true strategies, you can take control of your finances and work towards a future where money is no longer a worry. In this post, you’ll discover 10 secrets that can help you reach FI, from smart investing to mindful spending. Get ready to learn practical tips that can pave the way to a financially free life.
How does this sound?
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Reaching financial independence is about having choices and freedom. It means you can decide how to spend your time without money worries.
What is FI? Or Financial Independence?
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Financial Independence (FI) means having enough money to cover your living expenses without working. It’s about having freedom and control over your time.
To learn more: What is Financial Freedom? 12 Steps to Achieve It
Why does FI matter?
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FI matters because it gives you the ability to choose how you live your life. You can retire on your terms and spend time doing what you love.
To learn more: Discover Time Freedom & Design a Happy Life You Enjoy
1. Save Money Today
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Saving money today helps you build wealth for the future. It’s the first step towards financial independence and having more choices later on.
To learn more: Top 20 Epic Money Saving Challenges Unveiled to Save Money
2. Spend Less Than You Make
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Spending less than you make is key to growing your wealth. By managing your expenses, you can save more and reach financial independence faster.
To learn more: 12 Straightforward Ideas to Cut Spending and Budget Better
3. Learn How to Invest
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Learning how to invest is essential for growing your wealth. Investing wisely helps your money work for you, leading to financial independence.
To learn more: How To Invest In Stocks For Beginners: Investing Made Easy
4. Set Financial Goals
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Setting financial goals keeps you focused on your path to financial independence. Clear goals help you track progress and stay motivated.
To learn more: 10 Smart Financial Goals That You Need
5. Prefer a Debt Free Lifestyle
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Living a debt-free lifestyle means more financial freedom. Without debt, you can save more and invest in your future.
To learn more: 7 Simplistic Habits Needed for Debt Free Living
6. Choose to Live Frugally or Not
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Choosing to live frugally can speed up your journey to financial independence. It’s about making smart spending choices that align with your goals.
To learn more: The Ultimate Guide to a Frugal Lifestyle
7. Make Your Finances a Priority
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Making your finances a priority helps you stay on track to reach financial independence. It’s about regularly reviewing and managing your money.
8. Be a Constant Learner
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Being a constant learner helps you make better financial decisions. The more you know, the better you can grow your wealth and achieve financial independence.
To learn more: 35 Life-Changing Books That Will Change The Way You Think And Feel
9. Know your FI Number
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Knowing your FI number gives you a clear target for financial independence. It helps you understand how much you need to save and invest to retire on your terms.
To learn more: How to FI and Know Your FI Number Calculator
10. Become a Millionaire from No Money
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Becoming a millionaire from no money is possible with the right strategies. By saving, investing, and staying focused, you can grow wealth and reach financial independence.
To learn more: 15 Genius Strategies to Become a Millionaire with No Money
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Navigating personal finance can be tough for young adults, especially with limited education on the topic in school. Sound financial advice is crucial for making smart decisions about budgeting, credit, and investments. Learning these skills early helps avoid debt, poor money management, and financial mistakes. Here are the top 10 best financial advice tips for young adults to set you on the right path.
1. Create a Budget
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Creating a budget is key for managing your money. It helps you track your spending and ensure you’re not living beyond your means. A simple step to managing your money properly.
To learn more: How to Budget Money
2. Manage Your Debt
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Managing debt is crucial. Keeping debt low and paying it off quickly helps maintain a healthy credit score and financial stability. As a young adult, it best to stay away from the temptation to spend on credit.
To learn more: How to Get Out of Debt in 5 Easy Steps
3. Invest Your Money
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Investing is vital for a secure future. Start early and let your money grow over time. It’s all about patience and consistency. Start by investing a minimum of 10% of each paycheck.
To learn more: The Simplicity of Investing
4. Start Saving Now
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Start saving early. Even small amounts can grow over time. An emergency fund can provide a safety net for unexpected expenses. Use a money saving challenge to make saving more fun!
To learn more: Top 20 Epic Money Saving Challenges Unveiled to Save Money
5. Limit Your Expenses
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Limiting expenses helps save more money. Track all your spending, even small purchases, to understand where your money goes. This will help you to invest the rest!
To learn more: How to Budget Money on Low Income: 20+ Tips to Cut Spending
6. Build Passive Income Streams
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Building passive income streams can boost your financial stability. Find ways to earn extra money through hobbies or skills.
To learn more: Find a Side Hustle that Works for You
7. Create a Cash Reserve
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Having a cash reserve prepares you for unexpected expenses. Save three to six months’ worth of income for emergencies.
To learn more: Breaking Down the Purpose of a Rainy Day Fund
8. Learn About Taxes
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Understanding taxes is important. Know the difference between your gross and net pay to manage your finances better.
Learn More: Difference Between Earned Income, Passive Income and Investment Income
9. Consider a Term Life Insurance Policy
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A term life insurance policy is affordable for young adults and provides financial protection for your future family.
10. Take Action
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Taking action is essential. Set clear financial goals, break them into steps, and stay persistent to manage your finances effectively. Don’t delay starting your financial stability!
Learn More: 10 Smart Financial Goals That You Need
Find More Ideas for Young Adults
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These tips for young adults will help you manage money well and not make the mistakes many others were guilty of. You can build a strong foundation with money. Make your finances a priority and you can quickly reach financial independence.
To learn more: Financial Advice for Young Adults: 10 Easy to Follow Money Management Tips
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
A budget is an important tool to help you balance your income and your spending, keep your savings on track, and help you avoid debt. But like many good things, it sometimes goes off the rails. A person might start a budget with the best of intentions but then find it hard to stick to it. Or they might encounter an emergency expense and have a hard time getting back in the groove.
Learn what the common pitfalls are and how to avoid common budgeting mistakes to help your financial life thrive.
10 Budgeting Mistakes to Avoid
Here are 10 of the most common budget mistakes people make. Get familiar with them as a way to steer clear of them.
1. Not Having a Budget
Some people make the budget error of…not having a budget at all. Maybe it seems too hard, too time-consuming, or too boring; you’d rather be watching a hot new streaming series or playing with your dog.
Nevertheless, if you don’t create and follow a budget, you’re missing out on major benefits:
• You may not save enough in your bank account for your future
• You may feel stressed about reaching your long-term goals
• You might spend beyond your means, which could land you in debt and strain on your financial resources.
Recommended: Common Financial Mistakes First-Time Parents Make
2. Not Tracking Spending
Tracking your spending can be one of the more tedious tasks required for budgeting, but it’s also an incredible, truth-revealing tool. How else would you know when you are above or below your limits? You risk blowing past your limit by overspending in some categories, meaning you’ll have less (or none) for other categories. For example, overspend on eating out, and you might have less to put toward your retirement savings. Fortunately, there are an array of expense-tracking apps (many are free) that can help simplify this process.
3. Not Having Emergency Savings
The general recommendation is to save three to six months’ worth of expenses in a dedicated emergency fund. This is money you can draw on in case of emergency medical expenses and car repairs, for instance. It also provides a cash cushion should you lose your job, giving you time to get back on your feet without going into debt.
Not having an emergency fund can torpedo your budget, requiring you to draw money from other categories to cover unexpected expenses, or requiring you to take on debt.
If you don’t have a rainy day fund yet, it may be wise to set up automatic deductions monthly. Even as little as $25 can begin building a buffer. Keep your emergency cash in a separate savings account so you aren’t tempted to touch it. And if you need to dip into the account, be sure to budget additional savings until you are able to replenish it.
4. Not Considering Cheaper Alternatives
Budgeting doesn’t necessarily mean giving things up. Sometimes it can mean looking for cheaper alternatives. For example, you could swap out a pricey gym membership for one at a more budget-friendly place instead. Instead of renewing the same car insurance you’ve always had, you could shop around online for a better deal. You might even call your credit card issuer to request a lower interest rate or try to negotiate a medical bill. All of these options can free up cash in your budget that can go toward meeting other goals.
5. Thinking That You Can’t Have Fun While on a Budget
One of the reasons people don’t budget is it can feel like a real slog and a buzzkill. They assume that in order to budget successfully, they have to give up doing things they like. However, that’s not necessarily true. While a budget ensures that your necessary expenses are taken care of first, it can also provide discretionary funds that can be used however you want, from going to see a movie to booking a weekend getaway.
You may also consider making budgeting more fun by rewarding yourself when you meet certain goals. For example, you may want to treat yourself when you pay off a credit card. Just be sure you’ve already earmarked funds to pay for your reward.
6. Saving for Too Many Things Simultaneously
Another budgeting mistake involves trying to save for too many things at once. In this situation, it’s easy to stretch yourself thin. You might start to feel like you’re spinning your wheels and are unable to follow your budget.
A solution can be to narrow your focus. To prioritize your savings, first consider wants versus needs. For example, you may want to drill down on a single need, like building an emergency savings fund, rather than upgrading your mobile phone (which is a want, after all). Once your need is taken care of, then you can consider allocating funds for a want. Delaying gratification a bit can be a valuable tool when successfully managing your money.
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7. Not Adjusting Varying Expenses Every Month
Some expenses, like rent and utility bills, are relatively fixed. Others, like how much you spend on groceries can vary from month to month. If you don’t compensate for that fluctuation, you may be making a budget mistake.
If you notice you are suddenly spending more each month in a certain category, be sure to adjust your budget accordingly, or look for ways to cut back on spending in that category. To protect yourself in times of high inflation, it can be especially important to monitor this. Your food, gas, and heating expenses may well run high for a while.
8. Not Taking Into Account One-Time Expenses
One-time expenses can be real budget busters if you don’t plan for them ahead of time. Estimate the cost of the expense, and spread out your savings over a couple of months.
For example, if you plan to attend a wedding that will cost $800, you could start saving $200 a month four months in advance so you don’t end up footing the bill all at once. Or let’s say you know you’ll be needing a set of new tires soon; start stashing away cash in advance so you don’t get hit with a major bill that sends your budget spiraling. Another category many budgeters overlook is gifts; birthday and holiday presents can add up, so remember to set aside funds to afford them without a hiccup.
9. Having an Unrealistic Budget
It’s easy to be optimistic and have the best intentions when you create your budget, but make sure it’s something you can realistically stick to. Otherwise, you may have a budget mistake on your hands.
You may be overly optimistic, for instance, if you allocate 20% of your take-home pay toward one goal. If you oversave in one area, like for a downpayment on a home, for example, it may mean that you could incur credit card debt in order to buy necessities like groceries. Be honest with yourself about how much you spend and how much you can save.
10. Having the Wrong Budget Method for You
There is no one-size-fits all budgeting strategy. As we mentioned above, there are a number of different budgeting strategies you can use to help you build and stick to your budget. The best one is the one that works for you. Just because a budget strategy sounds good when you first learn about it or your best friend swears by it doesn’t mean it will work for you. It’s a budgeting error to cling to a system that isn’t working. If the technique you are using isn’t right for you, acknowledge that, and try something else.
The Takeaway
Now you know what is a common mistake made in budgeting; 10 of them, in fact. By avoiding these pitfalls, you give yourself a better chance of sticking to your budget, saving money in your bank account, and meeting your financial goals. What’s more, you’re far less likely to be derailed by debt, and interest payments that could eat into your ability to save and manage your money.
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FAQ
What are some pitfalls of budgeting?
Budgeting pitfalls that can derail your financial goals include failing to have a budget, not tracking your expenses, forgetting to account for varying monthly expenses, and not building up an emergency fund.
What is improper budgeting?
Improper budgeting can occur if your budget is incomplete, if it’s overly ambitious (not recognizing how much you actually spend, for instance), or if you don’t update it with new sources of income or expenses, you’re not budgeting correctly.
Why do people fail in budgeting?
A budget may fail for a variety of reasons, such as trying to achieve too ambitious a goal or too many goals at once; not tracking your expenses; and sticking with a budgeting strategy that doesn’t fit your needs. If the latter is the case, try multiple strategies to find the one that suits you best.
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Budgeting is such an adulting term.
Nothing can make you feel more like an adult when you need to learn how to budget your money, stop buying frivolous things, and save for retirement.
A budget just sounds like no fun.
Is it possible to learn how to budget money and still enjoy life?
However, the bright side to budgeting (and normally overlooked aspect) is by setting up a budget is you start to live within your means and start your path to financial freedom. Here are all the advantages of budgeting.
Personally, financial freedom is way more enticing!
So, that means a budget is necessary. A budget is key. A budget will change your life forever.
Just FYI…Here at Money Bliss, we like to call it a Cents Plan. Why? A budget sounds constricting. Take your money cents and put it with your head sense to make your Cents Plan.
We will detail what is the proper way to budget for money.
But the question remains how to budget money without pulling out your hair and still enjoy life. (It is easier than you think!)
Do you Need a Budget?
First, let’s answer this age-old debate. Do you really need a budget?
The simple answer is it depends on what you want out of life.
Do you want to live paycheck to paycheck, struggling with money, straddled with debt? Or with financial independence where you control your destiny?
Stress vs. joy. The choice is yours.
With human nature, our tendency is to spend money. While there are some savers in the room, it is typically a learned trait. Society wants quick results and with material items so cheap, it is easy to go overbudget.
Does extra income really solve someone’s money problems?
Last I checked, there are plenty of people who made millions are in bankruptcy because of overspending, not living within their means, and a budget wasn’t a term they used.
Here is a quick test…
If you have read this far into the post, then you need a budget. Keep reading. We have plenty of information to help you succeed. Also, you will learn various ways to budgeting that work for you.
Longer Answer & Must Read: Money Bliss Steps to Financial Freedom – this is the long term answer to “Do You Need a Budget?”
Purpose of a Budget
Okay, so we figured out that you need a budget. But, you aren’t truly convinced about why you need a budget.
What is the reason or main purpose of a budget?
The purpose of a budget is to first decide where you plan to spend/save money and then, see if you followed through on your plan.
Are you under budget? Are you over budget? Specifically, are you making progress to your life’s vision?
That is the role of a budget.
It is a guide for your money. Like we have said many times before you can manage your money or have your money manage you.
Personally, we use a budget to reach financial freedom faster and to make sure we have money set aside to travel. We have chosen to live a little more frugal than our neighbors (some might say much more frugal). However, the trade off for us is to travel now. Not wait until “retirement.”
For us, the purpose of a budget helps us to travel each year plus work our way towards financial freedom.
For you, what is the purpose of a budget? What do you want out of life?
Use on of these methods of budgeting as a guide to develop your budget.
Importance of Budgeting
There are many benefits of budgeting. However, most people struggle with a budget because saying no to yourself can be hard.
Let’s look at the bigger picture.
Do you want to manage your money? Or have your money manage you?
The choice is yours.
A budget is just a spending plan written out in advance.
You manage money your way!
That is a huge importance of budgeting. Personally, I would much rather decide how I want to spend my money. That is one of the biggest reasons we decided to pay off our debt in one year.
The importance of budgeting is to make sure you are living within your means and have the ability to pay for your expenses.
A budget doesn’t have to be complicated. It helps you lower big ticket expenses like housing, food, and transportation and then make sure you have enough remaining for the rest of your expenses.
If debt is a part of your life, then you are able to pay off debt faster by knowing where you spend money (and specifically what is worth spending money on). If you are debt-free, then you can continue paying in cash rather than racking up debt.
By moving towards a budget, then the foundation is laid to build a solid money journey.
You know where and how your money is spent. Then, you’re not left at the end of the month wondering if and when you will run out of money.
Another key importance of budgeting is it forces you to be organized with your finances. Then, you know where your money is going.
Creating a budget shouldn’t be overcomplicated or hard. That is something we will teach you how to do.
Benefits of Budgeting
Too many times people have good intentions of creating a budget and give up too quickly, then they never finally understand the benefits of budgeting.
It will take a few months or paycheck cycles to truly notice the benefits of budgeting (AKA spending less than you make).
You need to learn how to budget money and get into the groove of it.
No matter what we do…we can’t change how fast the days move. This is hard when you are working hard on your budget for the first time and want to see progress faster.
Consistency makes budgeting actually work.
A few of the benefits of budgeting include:
Stop fighting about money
Ability to reach your goals faster
Prioritize spending
Did you realize we only listed a few of the benefits of budgeting? Learn all nine Surprising Advantages of Budgeting your Money. (#7 may save your marriage)
As paychecks roll in and the months go by, you start seeing the bigger and bigger picture on the benefits of budgeting.
How to Manage Money
Now, that you read you need a budget, the purpose of a budget, the importance of budgeting plus the true benefits of budgeting, let’s learn how to manage money.
Specifically, how to manage your money.
Remember you have the choice to manage your money or have your money manage you. The choice is yours.
So, how can you manage your money?
One place to start is look at what others are doing. What makes them successful or not successful.
You can manage your money based off percentages like the Cents Plan Formula.
You can look at the household budget percentages to see how people spend money according to the statistics.
Ask a friend or family member how they manage money. (Some may tell you others won’t say a word.)
You can also go in depth with My Ultimate Money Blueprint.
Just remember, in the end, you want to manage money your way.
Steps on How to Budget Money
Managing money is more than just a budget.
It is about giving you choices in life.
These steps on learning how to budget money are very global. They aren’t specific tactics for budgeting. You can learn that in the 7 steps to making a budget.
These is the overarching themes that guide you on how to budget your money. Let’s budget your life and change your finances.
1. Life’s Vision
Before we starting truly budgeting, we just tracked our spending. Without fail each and every month, there wasn’t money leftover to do what we wanted in life. Things just didn’t seem fair.
Then, I got this hair-brained idea to pay off all of our debt in 1 year.
Let me tell you…it was the best decision we ever made. You can read about our journey to be debt free.
By paying off our debt, we decided to put us first and what we wanted in life.
Extra money was going towards all of debt each month. So, that meant everything else was hacked to make paying off debt possible.
During that time, we truly understood what we wanted in life, what was important to us, and how we would get there. I guess you could say we began to budget our life.
Do you know what your life vision is? Your why? Your next money goal?
If not, then start here on making money goals.
2. Live Within Your Means
While this seems blatantly obvious, it is one of the hardest things for people to do.
Simply put…
Income > Spending
Your income is greater than your spending (and hopefully savings is included in that number too).
One of the fastest ways to start living within your means is with a no spend challenge.
Plus it will help you uncover your life’s visions and what truly matters to you.
If you have been spending more than you make, then you are letting money manage you.
By living within your means, then you are managing your money your way.
Learn Exactly… How to Live Below Your Means and Love Life
3. Be Okay Being Different
The comparison trap is real.
With social media, it is hard to escape any type of comparison game. It used to be “Keep up with the Joneses’” and that just meant the neighbors and friends around you. Now, it is comparing yourself to influencers and people you will never meet in your lifetime.
The key to long term success on how to manage money is doing it your way, which means that your priorities will be different than everyone around you. And you have to be okay with being different.
Need ideas to stay on budget? Find 101 Fun Things To Do With No Money.
Need the motivation to live in a minimalist home? Could You Live In a Minimalist Home? (Real Life Minimalists) Hint: We were featured because while less is more.
4. Find a System to Work for You
The recommendation I always make when starting out with a budget is to use paper and pencil. Something tangible that you can touch and feel. Then, it becomes a constant reminder of your new ways of managing money.
Over the long-term with budgeting, you must find a system to work for you. Maybe an app? Maybe a spreadsheet? Possibly a software?
The key is finding a system that will work for you. And if you combine finances, it has to work for both of you.
This is where most people fail.
There are so many options for free and paid budgeting apps today. It may seem overwhelming. But, you can’t go back to other habits.
Today, we use Quicken and a personalized spreadsheet. Thankfully, Quicken does all of the hard work of downloading transactions, categorizing them, and creating reports.
5. Celebrate Successes
This is something that doesn’t happen as much as it should with money goals. Too many times, we are so focused on saving money and living frugally, we forget to live and enjoy life.
You need to stop and smell the roses.
In this case, you need to celebrate your wins along your journey.
Here at Money Bliss, we like to focus on…
Life. Money. Enjoy.
Life is first. You need to enjoy your life and figure out how money relates to your life. You need to budget your life.
Don’t be afraid to celebrate your success. And if you don’t believe us…One of the steps in the Money Bliss Steps to Financial Freedom is about celebrating success and doing something for you.
How to Set up a Budget
Setting up a budget shouldn’t be hard or complicated.
Don’t overanalyze. Don’t give up.
Most people have to work on setting a budget that works for them over a couple of months. Each month making small refinements.
The end goal is to set a budget that works for you.
A High-Level View of Budgeting:
Determine what your money goals are
Figure out your income
Track how much you are spending
Set up a Budget or Spending Plan
Track your progress
Yes, this is a very high-level view of setting up a budget. At this point, you don’t have to divide up into budgeting categories if you don’t want to.
There are plenty of resources on our site to help you finalize a budget that works for you.
Find detailed resources on how to make a budget.
The key to setting up a budget is be realistic.
You want to set yourself up for success – not instant failure.
One of the key ingredients to make you a success is pocket money. Personally, I believe this one category can make or break your budget. Understand how pocket money (AKA slush money) works.
When setting up a budget for the first time, set aside time to work through the budgeting process. A solid budget that will work (remember that is a key ingredient for success) needs to be based on your life’s visions. Not just slapped together in 5 minutes.
Learn How to Budget Money
Learning how to budget money is completely doable.
Budgeting shouldn’t be cumbersome or overwhelming. In the long run, the benefits of budgeting outweigh living paycheck to paycheck or stressed about money.
A budget makes sure your expenses (and savings) are below your income. From there you can decide how detailed you want to get with your budget.
The purpose of a budget is to help you successfully reach your life’s visions. The point where you start managing your money and not being managed by your money.
Further resources on budgeting:
Make sure to download our free budget printables!
From all of the free and paid budgeting apps, here are our top budgeting apps to check out!
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The average homeowner is sitting on hundreds of thousands of dollars worth of home equity right now.
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Home equity borrowing can be a smart way to access large sums of money, especially now when interest rates on alternative borrowing options are much higher. In today’s rate climate, specifically, both home equity loans and home equity lines of credit (HELOCs) come with significantly lower rates than personal loans and credit cards. And they often come with much larger sums of money that borrowers can access.
Like all financial products and services, however, there are some easy-to-make mistakes that home equity borrowers should carefully avoid. These are particularly important to avoid when borrowing equity as the home serves as collateral in these scenarios and owners could lose their property if they don’t pay back all that they’ve borrowed. But the mistakes to avoid in a different time and climate don’t always apply to this form of borrowing. To that end, below we’ve gathered some timely home equity mistakes to avoid this July.
Start by seeing what home equity loan interest rate you’re eligible for here.
4 home equity mistakes to avoid this July
Ready to tap into your home equity now? Then be sure to avoid these mistakes before doing so.
Waiting for home values to rise
Home values are high right now with the average homeowner having around $300,000 of home equity to potentially utilize. But home values, and therefore home equity, can change over time. If the value of your home drops, for example, in the face of poor economic conditions, then your available equity will, too.
And considering that today’s home equity levels are near record highs, it would be a mistake for most homeowners to wait for values to rise even further. Instead, consider acting now while you have a significant amount of financing available.
See how much home equity you could tap into here now.
Choosing a home equity loan over a HELOC
It may be tempting to choose a home equity loan over a HELOC right now thanks to the former’s slightly lower interest rate. But that could be a mistake with a cut to the federal funds rate looming. If that does occur, rates that lenders offer borrowers will drop, too.
And home equity loans have fixed rates, meaning you’ll need to refinance to get the new, better rate. HELOCs, however, have variable rates subject to change over time. So it’s probably better to go with this option, pay slightly more to start, but then be positioned for a lower rate when rates start to drop.
Not shopping around
It’s always an error to not shop around when looking for the most cost-effective borrowing option, but particularly now. Remember that the federal funds rate doesn’t directly dictate what lenders will offer borrowers. Accordingly, some have already started lowering rates on their products in anticipation of a formal rate cut to come. But you’ll need to shop around to find these lower-rate options. And that may involve using a different lender than the one who currently finances your mortgage loan.
Start shopping for home equity loan lenders here now.
Not monitoring the rate climate
The interest rate climate is constantly changing, particularly now that inflation has been cooling month-to-month. But a tick-up in the inflation rate (the next report comes out July 11) could affect rates on lending products. And the next Fed meeting (scheduled to begin July 30) could as well. So borrowers should carefully monitor the rate climate in July, especially on these dates, so that they’re better prepared to take advantage of any positive rate news when it’s announced.
The bottom line
Home equity borrowing is particularly beneficial now, thanks to lower rates than most alternatives and higher amounts of financing to utilize. But borrowers will need to take a strategic and nuanced approach to truly capitalize. This extends to the avoidance of simple but timely mistakes like waiting for home values to rise further, choosing a home equity loan over a HELOC, not shopping around to find the best (and cheapest) option and not monitoring the rare climate for timely opportunities. By skipping these mistakes now, borrowers will position themselves for home equity financial success both this July through the time their loan is fully paid off.
Matt Richardson
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
Your home could provide all the financing you need if you tap into it this July.
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If you’re one of the homeowners with an average of $200,000-plus worth of home equity right now, then you may wonder if it’s worth accessing and how you should do so. With inflation still elevated, albeit significantly cooled, and interest rates for traditional borrowing options high, many homeowners would benefit from using the equity they’ve already accumulated in their homes. And, there are multiple ways to do so, ranging from home equity loans to home equity lines of credit (HELOCs) to reverse mortgages and more.
To secure the most value from your home equity and keep costs minimal, however, you’ll want to take a nuanced and strategic approach. Below, we gathered four strategic home equity moves to make heading into July.
Start by seeing what home equity loan rate you could lock in here now.
4 strategic home equity moves to make for July
Have you already decided that home equity is your best credit option right now? Then you’ll want to approach it smartly, especially in July’s unique economic climate. Specifically, you should:
Consider a HELOC
While HELOCs come with slightly higher interest rates than home equity loans right now, they also come with the inherent ability to adjust over time thanks to a variable rate. This is a major advantage in an economy in which interest rate cuts appear imminent, possibly as soon as the end of 2024. If you go with a HELOC in July, then, you could soon see a rate cut. That’s the opposite of home equity loans, which will come with a locked rate that you will need to refinance to get out of.
See what HELOC option works best for you online today.
Monitor certain dates
The next inflation report comes out on July 11, courtesy of the Bureau of Labor Statistics, and the Federal Reserve will meet again on July 31. If the report on July 11 shows additional cooling in the inflation rate, then interest rates may continue to fall in anticipation of a formal rate cut at the end of the month. And, obviously, a formal rate cut from the Fed will cause them to drop even further. But since home equity rates change daily, you’ll want to closely monitor any movement on these dates for an opening to capitalize on a lower rate.
Use it for summer repairs and renovations
Do you need extra funding to finance summer repairs and renovations this July? Then a home equity loan or HELOC is advantageous compared to credit cards and personal loans. Not only do both of the former options have lower interest rates, but if you use the funding you receive for IRS-approved home projects, you may be eligible to write off the interest you paid on the amount you borrowed when it comes time to file your 2024 tax return.
Only use what you need
It can be tempting to overspend with a home equity loan or HELOC, especially now when home equity levels are near record highs and rate cuts appear likely. But that would be a mistake. Like all borrowing options, you should only use what you need, not what you have access to. Rate cuts haven’t taken place just yet and inflation is still above the Federal Reserve’s target 2% goal.
And remember that your home serves as collateral in these circumstances, so if you can’t pay back all that you’ve borrowed you could lose your home in the process. So only use precisely what you need this July – and any other time you tap into your home equity.
See how much home equity you have to borrow here.
The bottom line
This July could be a smart time to tap into your home equity but you’ll want to do so in a strategic and balanced way to minimize costs and maximize value. To do so, you should consider a HELOC and it’s variable rate over a home equity loan, monitor important dates in the broader economic landscape for opportunities to secure a lower rate, use the funding for potentially tax-deductible reasons like eligible home repairs and only use exactly what you need. By taking these home equity steps this July, you’ll significantly improve your chances of financial success both in the month you withdraw the funds and the months and years in which you use them in the future.
Matt Richardson
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
There are some upcoming dates in which mortgage rates may adjust downward, even slightly.
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Mortgage interest rates plummeted to near-record lows in 2020 thanks to the pandemic and interest rate cuts courtesy of the Federal Reserve. Since then, however, buyers and those looking to refinance haven’t been as fortunate. With a combination of decades-high inflation and multiple interest rate hikes designed to tame it, mortgage interest rates reversed their trajectory and hit their highest point since 2000 last summer.
However, while not nearly as low as they’ve been, there have been some encouraging developments so far in 2024. Rates are already nearly a point lower than they were toward the end of 2023, and that’s absent a formal reduction to the federal funds rate. And there’s new optimism that rates on home loans could drop even further, possibly in the weeks and months to come. For both buyers and owners looking to refinance, then, it’s important to know when to expect these potential changes.
To that end, below we gathered three important upcoming dates that could portend significant mortgage rate cuts to come.
See how low of a mortgage rate you could secure here right now.
3 upcoming dates that could affect mortgage rates
The timing of your mortgage application plays a key role when looking for the lowest rate possible. So, you’ll want to closely monitor the following dates this summer:
July 11, 2024
The last two inflation reports released by the Bureau of Labor Statistics have shown a slow but steady drop in the inflation rate, moving from March’s 3.5% to April’s 3.4% and then down from there to 3.3% in May. If the report for June – scheduled to be released on July 11 – shows yet another drop, it could spark renewed market optimism and a reduction in interest rates, including for mortgages. While a formal rate cut would be preferable for borrowers, economic indicators like a lower inflation rate could nudge lenders to start offering slightly lower rates in anticipation of an official reduction. So pay attention to this date.
Explore your current mortgage rate options online today.
July 31, 2024
The Federal Reserve will conclude its next two-day meeting on Wednesday, July 31 and, with it, will announce its next steps regarding interest rates and the fight against inflation. If the inflation report released on July 11 is an encouraging one, then, the Fed could potentially announce its first rate cut of the year. Or, they could simply hint at one to come (as they have been). Either move could affect what mortgage lenders offer borrowers. So if you have a home that you’re ready to buy, this could be a smart time to consider acting.
August 1, 2024
The Federal Reserve won’t announce its next rate move until 2:30 PM ET on July 31, giving lenders and the market very little time to react. But the next day, August 1, could see significant movement in the rate climate, depending on what happened the day prior. By August 1 the Fed’s moves (or inactivity) will have had a chance to reverberate through the wider rate climate, potentially giving borrowers a chance to capitalize by locking in a lower rate. So you should be prepared to lock in a rate on this date, even if it means having to unlock and lock in a better, lower one before closing.
The bottom line
Mortgage rate movement is often full of speculation and there are a variety of factors involved. With a new inflation report and Federal Reserve meeting scheduled for July, however, and the reverberations from that potentially felt dramatically on August 1, homebuyers and owners looking to refinance should mark their calendars for these dates now. And, start shopping for a lender to utlize in advance so that you’re best positioned to take advantage of any positive rate action.
Start shopping for mortgage lenders here.
Matt Richardson
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
Deciding between an online and a traditional bank? First, let it be known that no two people’s banking styles are exactly the same. For every person who loves popping into their local branch and chatting with their favorite teller, there’s someone else who avoids bank branches at all costs, preferring to seamlessly swipe their way through financial transactions on their mobile phone.
Traditional vs. online banks also have other important distinctions, including the dollars-and-cents bottom line. Their typical fees charged and interest rates paid differ as well.
So how can you decide which kind of financial institution best suits your needs? Read on to get the intel you need, including:
• The differences between traditional and online banking
• How online banking vs. traditional banking works
• The advantages of online banking
• How to open an online bank account
Differences Between Online and Traditional Banking
Online and traditional banking both typically offer reliable ways to manage your money, but they do differ considerably in several ways. First, a little lesson in what they are:
• Traditional banks are ones that have branches you can visit, have ATMs, and often have a website and app for conducting some business digitally. They tend to charge account fees and offer interest rates that may be lower than online banks.
• Online banks offer many (most, even) of the same services as traditional banks, but they don’t have a footprint in the physical world. You won’t be able to visit a branch or use their branded ATMs (though they may partner with an ATM network or refund your fees). The lack of branches usually allows them to charge lower or no fees and pay depositors a higher interest rate.
Now, here’s a closer look at some key points of differentiation:
Security
If you keep your money at a traditional bank and visit a branch, you likely feel reassured by the presence of security guards and perhaps a glimpse of a massive vault inside. You might wonder if online banking is as secure as a bricks-and-mortar bank. If you use a strong password and avoid conducting online banking with a public WiFi connection or on a public computer, you are following good advice for keeping your account safe. While there are no 100% guarantees, your money should be well protected.
What’s more, both online and traditional banks abide by the same federal regulations. This means that if your financial institution is insured by the Federal Deposit Insurance Corporation, you are covered in the event of a bank failure up to $250,000 per depositor, per account type. Want to be sure of that safety net? You can use the FDIC BankFind to make sure your online bank is FDIC-insured.
Bank Fees and Interest Rates
As briefly noted above, online banks typically save big on real estate and staffing costs and pass that along to their customers. Many charge no or low fees. Which may be a very big deal: According to the Consumer Financial Protection Bureau, Americans pay more than $15 billion a year on bank overdraft fees, which are usually $30 to $35 a pop.
Online banks also likely offer higher interest rates on saving accounts and may offer interest on checking, too. For instance, at press time, SoFi was offering 1.80% APY on savings, while Chase offered 0.01%. That’s quite a noticeable gap. So if you don’t use traditional banking services, you can probably save money and earn more interest with online banking.
24/7 Banking
A few years ago, online banks tended to have the advantage here, providing services around the clock. Traditional banks, which may only be open from 9 a.m. to 5 p.m. Monday through Friday, have been working hard to close the gap and offer services (from check deposits to money transfers) via their website or app at all hours.
Still, online banks may have the edge in terms of 24/7 support, since they have offered this kind of service from the get-go. Making mobile deposits or switching up your password at 2 a.m. is no problem for them, and if you hit a speed-bump, you can likely chat or phone your way to help.
ATMs
If you’re an account holder at a large traditional bank, you’ll probably have a good number of conveniently located ATMs that you can access without a fee. However, those who bank at a smaller, local or regional institution may have fewer options. They may have to make a special trip to get to their bank’s ATM or otherwise pay an out-of-network fee.
How about online banking and ATMs? Digital banks don’t have branches, so how can they have cash machines, you might wonder. The answer is: They don’t. Instead, they usually have work-arounds in this situation. Most online banks partner with a large cash-machine network that you can use for free for withdrawals or for depositing cash at an ATM. Or they may have an arrangement that refunds you for any bank fees you incur using an ATM. Online banks tend to work hard to level the playing field on this front.
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Open a SoFi Checking and Savings Account with direct deposit and get up to a $300 cash bonus. Plus, get up to 4.60% APY on your cash!
How Online Banking Works
If you’ve been used to traditional banking, online banking may seem like a brave new world, and a somewhat intimidating one at that. In truth, however, online banking closely mirrors what happens at a bricks-and-mortar bank, minus the bricks-and-mortar and those free lollipops.
For example, you can open checking and savings accounts, get a debit card, sign up for automatic bill pay, transfer funds, and more. The one challenge can be withdrawing or depositing cash; there’s no teller service, but you may be able to manage cash at a linked ATM (as mentioned above). You may find that the pros of mobile banking and online transactions make up for this inconvenience.
If you typically go into a branch for certain services, such as wire transfers, you’ll likely find you can do them online with a digital bank. And the fact that you can do them on a website or app means the bank isn’t paying the overhead of having a bricks-and-mortar location. So you are probably earning more interest and avoid account management fees than if you kept your money at a traditional bank.
Recommended: How Many Bank Accounts Should I Have?
Advantages of Online Banking Over Traditional Banking
Here’s a side-by-side comparison of how online vs. traditional banking compares.
Feature
Online Banking
Traditional Banking
Interest rates
Typically have considerably higher interest rates since they can pass along their savings on overhead to the customer
Tend to have lower APYs (annual percentage yields) as they need to cover the costs of their branches and staffing
Bank fees
Usually offer no fees or lower fees than traditional banks
Often assess monthly account fees, minimum balance fees, overdraft charges, and more
ATMs
Probably lack branded ATMs but likely partner with a network for fee-free transactions
Typically have a network of their own ATMs, which may or may not be conveniently located
Customer Service
Usually offered 24/7 via chat or phone
Usually offered in person during business hours and by chat or phone 24/7
Security
High-level online security and fraud protection
High-level online security and fraud protection at large chains
How to Know if Online Banking Is Right for You
Whether you choose to bank online or with a traditional financial institution is a very personal decision. Here are a few of the most important signs that online banks will be a good fit:
• You prioritize high interest rates and low fees to help your money grow faster.
• You are comfortable accessing a partner network of ATMs vs. a bank’s own branded machines.
• You are satisfied with seeking customer service via chat or phone.
• You are confident managing your money without having a personal banker at your local branch.
• You are digitally savvy enough to conduct transactions online; you also know not to use public WiFi or computers for banking business or else you’ll risk bank account fraud.
Opening an Online Bank Account
With online banking, you don’t have to wait until Monday morning to open a new account. You can just log on from your couch on a Sunday afternoon to start a new account and otherwise manage your money.
Technology is allowing financial companies to change the entire banking experience and improve it for customers. One of these new ways is by opening an online bank account with SoFi. With our Checking and Savings, you’ll earn an amazing APY and pay no account fees.
Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 4.60% APY on SoFi Checking and Savings.
FAQ
How does online banking work?
Online banking allows you to manage your money without going into a bricks-and-mortar branch. Using the bank’s website and/or app, you can spend, save, transfer funds, and conduct other business.
What are the advantages of online banking over traditional banking?
Online banking can offer several advantages: Some people prefer using a website or app vs. going into a bank branch as often happens with traditional banking. What’s more, online banking usually offers lower fees (or none whatsoever) and higher interest rates than bricks-and-mortar banks.
What is a disadvantage of online banking?
Online banking doesn’t offer the opportunity to build a personal relationship with your banking team. Also, depositing cash can be a challenge.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Inside: Dream about what life could be if you didn’t have a job? If you are in the boat of I don’t want to work anymore, then you must read this post.
The reality is most people have days where they absolutely have no desire to work. Yet, you know deep down that you have to make money in order to pay your bills.
You are thinking… I don’t want a job I just want a life.
So, what happens when you don’t want to work anymore?
Well, if you don’t want to go to work today, you could take a sick day and get away with it. You can do that here and there for a while, but unfortunately, your employer is going to catch up to the quality of work that you are able to do or not do.
At this point you might be saying, you know I don’t want a job, I just want a life.
And that is very understandable if you don’t want to work in a field anymore job that you don’t love.
You want time freedom in your life!!
We will dive into the reasons for not wanting to work and how to overcome them when you need the money.
What to do if I don’t want to work?
The best thing to do is to find a job that you love and want to do on a daily basis!
Something that you can’t wait to go to work to be able to do. A way to make money that doesn’t feel like a job!
Unfortunately, too many of us feel we cannot do what we want to do when we want to do it. Thus, we want more out of life.
In this post, we are going to detail. If you don’t want to work anymore, what steps can you take to quit the job and live the life that you want?
Is it normal to not want to work?
I think each and every one of us has a desire not to work. Maybe you are thinking “I hate my job.”
This desire to work may ebb and flow based on what is going on, how you are feeling, and your current situation.
Especially if you are in a situation where you do not enjoy your boss, your co-workers, the company culture, or the current assignment, it will make going to work harder.
Whatever your job entails, if you are not enjoying what you’re doing, it is harder and harder to go to work on work every day.
As you can read on Reddit personal finance threads, there are plenty of people who have shared their stories about how they don’t want to work, seeking solace from others, and looking for ways to get out of the current situation that they’re in.
Also, if you are thinking that I can never make it until I am 55 then think about retirement. You are just sick of working and you may be in your 20s, 30s, or 40s.
It is okay to dream about not working daily!
Why We Don’t Want to Work
There are several reasons for not wanting to work.
Primarily many people do not feel engaged at their jobs, which makes them less likely to want to continue working. Gallup found that only 15% of employees feel engaged at work.1
In addition, there is an increasing amount of competition in the workforce as well as a lack of clear career paths and advancement opportunities for those who desire more freedom or flexibility with their careers. This can lead someone to think about becoming self-employed or going into a different field.
There are many reasons for not wanting to work.
People on Reddit share their stories about how they don’t want to work anymore. Some are still in school, some are retired, and others have other reasons for not wanting to work.
We all have heard about the Great Resignation with people saying “enough is enough; I don’t want to go back to work.”
1. Burnout
Burnout is when an employee begins to feel exhausted and overwhelmed by their job. They do not want to be there anymore and it negatively impacts the happiness of both the individual and their work environment.
If you want to stop working, it is okay!
Just make sure you can still be financially independent.
2. Not enjoying your job
Many people wake up and say, “I don’t really want to do the work today.” If you are not enjoying your job, it is harder and harder to go in every day.
People don’t want to work because they feel like they’re working more than is necessary, or there’s no meaning behind their job anymore.
If you find yourself not enjoying your job, it might be time to leave. Many people experience dissatisfaction with their jobs and want to retire early.
Many times this is when people leave their jobs and find success is the best revenge.
3. Mental Health
Mental health issues can be caused by outside factors, such as stress and anxiety, and can lead to feelings of wanting to avoid work.
For many, the idea of going to work can feel overwhelming and lead to feelings of anxiety and dread. It is also essential to take a step back and assess the quality of your mental health.
If this is something you have been struggling with, it is important to think about why you are feeling this way and take steps to address it.
If this persists, it is important to seek professional help. Visiting a therapist or counselor can help you identify the root causes of your negative feelings and develop a plan to overcome them. In many cases, your workplace may even cover the cost of therapy, so you don’t have to worry about paying out-of-pocket.
This is one of the good excuses to miss work.
4. Lack of Interest
When you find yourself feeling like you don’t want to work anymore, it’s important to take some time to examine the reasons why and identify potential solutions.
It could be that you’ve been in the same job for a long time and need a change of scenery.
Maybe you’re feeling overwhelmed and undervalued by your current role.
Possibly you have other things that are taking president and you don’t have the same level of interest.
Whatever the source of your feelings, they need to be addressed.
5. Support System
Friends and family can be a great source of support, offering advice and understanding. However, if they do not believe in you, it can make it even harder to find motivation.
On top of that, if you have family obligations such as childcare, it can be difficult to make the time to work or even to access the necessary resources.
Talking to your loved ones about your feelings and concerns is a great first step in getting through this tough time.
One of these family emergency excuses could help you in a pinch.
6. Lack of Appreciation
It can be incredibly disheartening to work hard and not be appreciated.
It’s easy to become discouraged and feel like you don’t want to work anymore if you’re putting in the effort and not being recognized.
When this happens it’s important to remember that you are valuable and your work does matter. It’s also important to talk to someone about how you’re feeling, whether that be a friend, family member, or therapist.
You just want someone to say to you, “I appreciate you!”
7. Thinking of Career Change
If you find yourself in a position where you don’t want to work for weeks on end, it’s important to figure out why. Are you having a hard time at your current job or do you no longer wish to pursue a career? If it’s the latter, it can be freeing to consider all the possible career changes you can make.
Many people don’t want to work anymore because:
they don’t want to pursue a career in corporate America
tired of the same job they’ve been doing for years
don’t want to continue vying for raises, bonuses, or promotions
It’s okay to dream about something else, something fresh and different.
You may find yourself researching other opportunities to put your skillset to use.
9. More Interest in Hobby to Turn into Side Hustle
For many people, having a side hustle is a great way to make extra money, explore a passion, and turn a hobby into something productive and profitable.
If you find yourself no longer wanting to go to work and feeling more fulfilled in your hobbies, it may be time to pursue a side hustle.
You can monetize your hobby and create a side gig to give yourself a new source of income.
This will provide you with the freedom to pursue what you’re interested in and make a living from it. It can also give you the option to quit your job and explore other areas of your life.
10. Wanting to make money passively
Making money passively is a goal that many people desire, but it can be hard to turn into reality.
While it is possible to make money passively in the stock market, real estate, or a small business, one can also earn passive income by doing any type of side hustle.
It is better to find ways to make passive income from something you enjoy.
You need to figure out what should I do for a living that will make passive income.
How do you make a living if you don’t want to work?
If you don’t want to work, you still need to find a way to make a living.
Passive income is the most effective way of making money without working.
It allows you to work on your business or hobby full-time and then withdraw a certain amount every month that helps pay for all of your expenses, including food, rent/mortgage, etc.
So, your first step is to create a passive income source.
If you don’t, then don’t say, “I don’t want to do the work today.”
In fact, there are many good excuses to miss work.
Can I survive without working?
Well, that completely depends on your financial situation. (Since most people are not aware of where they stand financially, here are the Money Bliss Steps to help you.)
If you are lucky enough to be a trust fund baby with somebody else managing your money, you are likely fine and can survive without working.
However, if you are like most normal folk, then you may be able to survive for a little bit without working. But over time, it will catch up to you. Not working is not a long-term solution.
While you may be on unemployment and collecting unemployment benefits, or maybe even disability payments that are not enough to make ends meet. In most cities, you can survive in the short term without working. But in the long term, it is not going to work out for you.
If you are serious about not wanting to work, you need to find the FIRE movement, which means financial independence retire early.
That is a better term for not wanting to work anymore. When you want to quit the job and do something else in life, you have to do what is called FIRE.
5 Simple Steps To Quit the Job
To quit the job or the career path that you were in, you have to take steps ahead of time to make sure that your transition (financially) is as smooth as possible.
The biggest question is how can I make money if I don’t want to work ever.
You set aside money to take care of your obligations and bills while being able to live the life that you want to live. That means you have more types of income than just a paycheck.
These are the exact steps you need to take to quit the job. Obviously, it won’t happen overnight. But, you can see the light at the end of the tunnel.
1. Make an Exit Plan
First, you have to make a plan of how finances will work without a typical paycheck. You need to learn how to FI quickly.
In order to retire early or quit the job, you must be able to financially support yourself without a consistent income coming in from a regular paycheck.
Specifically, it means you need to find ways to make passive income. That could be in the stock market, real estate, small business, side hustle hobby, or driving for Uber. There are a variety of different ways to make money; it is just better to find ways to make money doing something you enjoy.
One of the things you will quickly realize is that to make money passively, you must have money on hand to invest. That is the “Catch 22” of why people get caught in the cycle of it being too difficult to change their financial position and just give up.
If you don’t like your job and you don’t want to work anymore, then you need the mindset that something is gonna change, you are gonna make it a reality.
It will be hard for a short period of time to save up the money necessary to build the steps to be able to quit working or FIRE, but you might be surprised how you can double $10k quickly when you put your mind to it.
Motivation is a great thing, especially given the right circumstances.
Related Answers:
2. Save Money
If you don’t want to work anymore, then you have to save money to cover your bills. Period.
There is no way to get around that situation.
Your friends and family are not going to pick up the slack just because you want to quit your job.
So, you have to find all of the possible ways to save money. A great place to start is with one of our money saving challenges.
Another great way to save more money is by changing your habits.
In order to “retire early,” you must save a majority of your income at an early age to gain the benefit of compounding early. If you are thinking, “Well shoot, I missed that bucket,” then don’t worry … now is better to start than waiting too long.
Things only look up from here!
3. Cut Expenses
You have to be able to live below your means.
If you’re not interested in your job or the career that you are currently in and you don’t want to work anymore, then you need to cut your expenses in order to save more money.
One of the wisest tricks of the FIRE community is becoming a thrifty person. You know when to spend money on quality items as well as you know when to save money on frivolous expenses.
4. Pick a date.
As with any smart financial goal, you need to put a deadline on when you want things to happen.
If you are not happy with your job and your depression isn’t worth it anymore, then you have to find a date to move on and do something else.
Obviously, you’ll need some of these FIRE calculators to learn how much you need to make your dream a reality.
that happen. Here are some of the best fire calculators that you can find, to learn, how much you need to quit your job.
5. Start Hustling
Let’s face it, 2020 changed the workplace as well as our priorities. Honestly, I think it was for the better. We all realize there is more to life than just the constant line of being busy.
In addition, many of us found the extra time that we can now put to work and start to make money.
It is easier to work when you have a target goal in mind of not working anymore. You must start saving money to put to work passively.
Below you will find ideas to help you search out the best serious ways to make more money. The last thing you want to do is learn what happens when you don’t save enough for retirement.
When You Don’t Want to Work Anymore
In this post, we answered the question of how can I make money if I don’t want to work.
The secret sauce is called passive income.
You must earn money on your investments. So, yes, now is a good time to invest in stocks.
There are many ways to make passive income; it could be in the swing trading the stock market, real estate, a business venture, a side hustle, or simply long-term investing.
Unless you are massively independently wealthy and part of the 1%, with millions of dollars that you do not know what to do with, then you will want to make some money on your nest egg that you create over time.
If you are saying, “I just want a life,” then stop waiting for the magic time for your retirement. You don’t have to wait until the retirement age of 65 years old.
You are in charge of your life and can make it happen… if you put your mind to it.
Source
Gallup. “What Is Employee Engagement and How Do You Improve It?” https://www.gallup.com/workplace/285674/improve-employee-engagement-workplace.aspx#:~:text=Based%20on%20over%2050%20years,in%20the%20%22engaged%22%20category. Accessed March 11, 2024.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
If you’re buying a home or plan to, there are a few good reasons you may want to lock in your mortgage rate this week.
Getty Images/iStockphoto
If you’re a potential homebuyer who’s wondering whether it really makes sense to buy a home in today’s tough (and expensive) housing market, you certainly aren’t the only one. For starters, home prices remain elevated due to a mix of limited inventory and persistent demand. And, ongoing inflation issues have led the Federal Reserve to keep its benchmark rate paused at a 23-year high. As a result, mortgage rates remain elevated, vastly increasing the cost of buying a home and giving many buyers pause.
But while buying a home can be a little more difficult (and substantially more expensive) in the current economic environment, it still makes sense to consider in many cases. After all, owning a home comes with a long list of benefits for homeowners, from the safety and security this type of investment provides to the potential to build equity in your property (which can be accessed at an affordable rate in the future).
If you’re going to purchase a home soon, though, you have a crucial decision to make: when to lock in your mortgage rate. And, with various economic factors at play, there are a few compelling reasons why this week might be an opportune time to make your move.
Learn more about your top mortgage loan options online now.
4 big reasons to lock in a mortgage rate this week
There are a few reasons you may want to consider locking in a mortgage rate this week, including:
Mortgage rates have dipped
The Federal Reserve decided to keep interest rates paused during its meeting earlier this week, and, as a result, mortgage rates have experienced a decline, with 30-year conventional loan rates dropping from an average of about 7.07% last week to today’s average rate of 7.00%. What that shows is this latest pause in rate hikes, coupled with other favorable economic data — like the latest inflation report showing a slight drop month-over-month — has created a more favorable environment for borrowers.
After all, lower mortgage rates translate to reduced monthly payments and the potential for significant savings over the life of your loan. And, all it takes is a fraction of a percent, like the rate drop we’ve seen over the last week, to make a big difference in terms of your loan costs. So, by locking in a mortgage rate now, you can capitalize on this dip and potentially secure a more affordable mortgage.
You may also want to consider that home prices may continue to stay elevated or even rise in many markets. If this home appreciation trend continues, delaying your purchase in hopes of lower rates could result in paying more for a home, potentially negating any benefits you gain from waiting for mortgage rates to drop further. But by moving forward with your home purchase now, you can potentially secure a property before prices climb.
Compare some of the best mortgage rates available to you here.
The uncertain economic environment poses risks
While mortgage rates have decreased recently, the economic landscape remains uncertain. Inflation, though it’s showing signs of easing, has proven stubborn over the past couple of years, and there’s no guarantee that this downward trend will continue. If inflation were to climb again unexpectedly, the Federal Reserve might respond with more aggressive rate hikes, leading to higher mortgage rates.
And, that’s not just a theoretical. The Fed has been clear about its goal of reducing inflation by keeping rates elevated, and it has already put off the expected mid-year rate hikes in lieu of more rate hike pauses. By locking in your rate now, though, you protect yourself against potential future increases and gain peace of mind in an unpredictable market.
Limited home inventory calls for quick action
The housing market also continues to face a shortage of available homes. This limited inventory has been a persistent issue since the start of the pandemic, driving up competition among buyers and putting upward pressure on home prices. And, while there’s hope that the inventory problems will improve in the coming months, many homeowners are holding onto their current record-low mortgage loan rates right now.
So, rather than selling and buying a new home with a much higher mortgage loan rate, many current homeowners are opting to stay put instead. That is making it even more challenging to find suitable properties in today’s market. By locking in the most favorable mortgage loan rate you can find right now, though, you position yourself to act quickly when you find a home that meets your needs, giving you an edge in a competitive market.
Increased lender competition can benefit buyers
Today’s elevated mortgage rates are slowing down the mortgage loan market, which means that lenders are vying for reduced business. This competition can lead to more favorable terms for borrowers, including lower rates and reduced fees. By engaging with lenders and locking in a rate now, you can take full advantage of this competitive environment, potentially securing terms that might not be available if market conditions shift.
Some lenders are also offering loan products that are designed to make homeownership more accessible, such as low down payment options, first-time homebuyer programs and loans with flexible credit requirements. But, these products may become less available or less favorable if economic conditions change. Making your move now allows you to consider these or other specialized offerings as part of the mortgage loan process while they’re still readily available.
The bottom line
While the decision to lock in a mortgage rate is ultimately based on your circumstances and goals, the current market conditions present a compelling case for action. Mortgage rates are down compared to last week, and increased lender competition could mean that there are more (or better) mortgage loan options to consider. And, by locking in a rate now, you could not only secure a more favorable mortgage rate but could also position yourself to act decisively in a competitive housing market.
Angelica Leicht
Angelica Leicht is senior editor for Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications.